Legislature left out of major change

Special to the Herald-Guide - August 19, 2011

By John Maginnis
Ask state employees whatís the biggest out-sourcing deal going on in state government and many will say itís the Jindal administrationís plans to privatize their health insurance, which is now covered through the Office of Group Benefits.

In Central Louisiana, they might say the sale of prisons, which the Legislature nixed, though the administration on its own could turn over more facilities to private contractors.

Public school officials might point to the growing number of charter schools run by private companies.

They would all be way off, but excused for their ignorance, because the biggest change taking place in state government has proceeded with minimal public debate and without even our elected representatives approving a plan.

By early next year, the planned privatization of the state Medicaid program will begin turning over $2 billion per year in tax dollars to private insurance companies to administer the care of 850,000 residents, mostly children. They form the first wave of the stateís transformation of public healthcare that will eventually extend to the full 1.2 million in the program. That will grow by another half million or so in 2014 under the new federal healthcare law, assuming it survives the courts and the Republicans.

With or without the new federal law, state privatization of Medicaid will go on, realizing the vision of a 24-year-old Bobby Jindal, who, as healthcare secretary in 1996, called for moving in that direction.

Under the new plan of Coordinated Care Networks, five insurance companies chosen by the state will form networks of doctors and hospitals to treat Medicaid patients under either of two managed-care payment models. When the plan is fully implemented, the administration projects $135 million in annual savings.

Legislators in general support the concept, or at least few have raised objections. Ordinary citizens who pay for part or all of their health insurance have to deal with private companies, so why should Medicaid patients be different?

Lawmakers may have accepted that reasoning, if they were asked, but they werenít.

In the 2010 session, one outspoken critic of privatization, Sen. Joe McPherson, D-Woodworth, had a provision inserted in the appropriations bill in committee to require legislative approval of a final healthcare plan.

When the bill reached the floor, a large set of what were supposed to be clean-up, technical amendments were offered for one up-or-down vote. According to Senate minutes, McPherson complained that, on short notice, there was no way of knowing what was in the many pages of amendments. Senate Finance Committee Chairman Mike Michot, R-Lafayette, assured him all the changes were technical.

After the bill passed, McPherson discovered that in that stack of allegedly technical changes, his amendment requiring legislative approval had been deleted and one sentence was added, authorizing the administration to establish and write rules for "Coordinated Care Networks" for Medicaid.

McPherson doesnít know who made the switch when, and so says Michot. It just happened. The administration, after a false start, wrote rules on how the networks would operate, addressing the concerns of hospitals and some, though not all, pediatricians.

Pending the resolution of protests from two companies not picked to participate, the state will sign contracts with the selected insurance firms, which will begin phasing in the networks next year.

Lawmakers took one more stab at relevance with a bill this year to authorize the Legislature, if it finds the new system lacking, to terminate the contracts after three years. The bill passed both houses overwhelmingly. The governor vetoed it.

So, with the administration calling all the shots so far, the largest public contract in state history will soon be let, marking arguably the biggest change ever in the delivery of government services, with almost no input from the Legislature. Privatization marches forward, and the babies will lead the way.

One hopes for the best for them. The likelihood, however, of the sweeping transition taking place without complications, mistakes and unintended consequences is as remote as no political indictments being handed down in the next year.

There are going to be problems with doctors and mothers complaining about companies disapproving procedures or mishandling claims. When their frustration levels peak, who are they going to call? Their legislators, of course. When those constituent complaints start coming in, the consolation for lawmakers is that they can honestly say they had nothing to do with it.